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In a room dominated by a large painting of the Founding Fathers signing the Constitution, liberals were seated next to conservatives at ultra-conservative Hillsdale College’s Kirby Center on Capitol Hill. | Getty

Strange bedfellows unite to push for subsidy reform in farm bill

Cutting farm subsidies for the wealthy has become a policy platform for disparate groups to rally around in the 2018 farm bill cycle.

This is part of an occasional series examining the political challenges facing Congress as it aims to pass the next farm bill by September 2018, as well as the implications for policies that shape rural development, farming economies, nutrition and other aspects of our food supply.

Wearing his signature bow tie, clear-rimmed glasses and a bright-green bicycle pin, Rep. Earl Blumenauer was so excited talking farm policy that he pounded the adjustable podium one too many times — and it dropped a few inches.

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Podium mishaps notwithstanding, the audience was rapt. At first glance, it didn't make for a natural political fit. Blumenauer, an Oregon Democrat who represents one of the country’s most liberal enclaves, was addressing officials from conservative think tanks and political advocacy groups, like Americans for Prosperity and Taxpayers for Common Sense.

Stranger still, the conservatives were joined by left-leaning advocacy organizations, like the Environmental Working Group and the National Sustainable Agriculture Coalition.

In a room dominated by a large painting of the Founding Fathers signing the Constitution, liberals were seated next to conservatives at ultra-conservative Hillsdale College’s Kirby Center on Capitol Hill. Across the street is The Heritage Foundation, whose crusaders were also represented at this gathering of unlikely allies.

“I think we have a unique opportunity to reshape the farm bill, that we’ve never had before,” Blumenauer told the audience last month. “It’s been impervious to reform in part because we really haven’t been able to coalesce the vast array of stakeholders who really don’t like what’s happening.”

The other headliner at the farm bill strategy session was Sen. Jeff Flake (R-Ariz.), a longtime critic of U.S. farm policy and — before the Trump era — a darling of the right.

The October event brought together at least 20 groups from across the ideological spectrum, offering an early indication that during the 2018 farm bill cycle, the coalition pushing for reform is broader and more organized than in the past. And the reason these strange bedfellows cheered an Oregon Democrat who rode a bicycle to the event? They all agree on cutting farm subsidies for the wealthy. It’s become a policy platform to rally behind.

For conservatives and taxpayer watchdog groups, targeting farm subsidies is part of a long-game strategy to pull Washington’s tentacles from every corner of the economy. For liberals and sustainable agriculture advocates, reforming farm subsidies is a means of chipping away at the U.S. farm policy status quo, which they argue harms the environment, favors large operations, and drives farmers off the land.

The approach is a 180-degree turn from the last farm bill cycle, when groups like Heritage Action, The Heritage Foundation's political arm, and Club for Growth pushed for separating nutrition and agricultural programs into two bills and slashing spending on food stamps. Their late-in-the-game play nearly derailed the farm bill in the House, which voted down a version that cut the Supplemental Nutrition Assistance Program by more than $20 billion over a decade, and then passed a bill that stripped out food stamps entirely — something that had no chance in the Senate.

In the end, the 2014 farm bill —sweeping legislation covering policy on commodity and crop insurance as well as nutrition, conservation, rural development and agricultural research —cut just $8 billion from SNAP. It left intact the link between nutrition and farm policy, preserving the longstanding political alliance between rural and urbaninterests that’s driven the law’s passage for decades.

The conservative groups’ defeat was a wake-up call. After decades of trying to cut nutrition and farm programs, they had little to show for it.While The Heritage Foundation and Heritage Action, along with other conservative groups, still support those ideas, someleaders within the expanding coalition said there was a realization that targeting subsidies for wealthy farmers is a more defensible and politically palatable effort than cutting benefits that help the poor afford food. The new laser-focus on farm subsidies also has attracted a broader range of interests.

“I don’t think there’s ever been a time when The Heritage Foundation and all these conservative groups have focused so much energy and capital on farm subsidies," said a veteran farm bill lobbyist involved in the coalition. "Basically, the entire conservative movement has united to focus on farm subsidies.”

Blumenauer is fired up that elements of the conservative right are lining up with the left. At the October event, he said he sees an opportunity to shake up farm policy because of the intraparty warfare in a GOP that’s neither led nor fully embraced by President Donald Trump.

“What we’ve gotten out of the last two farm bills is the minimum that they could give back and pass a bill in the troubled congressional waters. And I will tell you,” Blumenauer said, deepening his voice and slowing his delivery: “These congressional waters are not like anything we’ve seen. Nothing. I mean like nothing.”

Politics create an opening

The 2018 farm bill cycle is the first time since the Eisenhower era that the bill will be written with Republicans controlling the legislative and executive branches. Though Republicans are fractured, conservative groups still believe they now have a better chance of moving the ball — even slightly — toward their long-term vision: A world where rank-and-file Republicans are weanedfrom supporting any subsidies, whether they are for solar panels, oil or wheat.

In fact, Heritage Action sees its greatest opening if the farm bill becomes primarily a GOP exercise. “When the farm bill as some sort of bipartisan feelgood measure breaks down is when we have an opportunity,” said Dan Holler, vice president of Heritage Action.

Many of the groups that have joined the reform coalition have long engaged on agriculture and nutrition policy, but their advocacy efforts have often been fragmented and focused on disparate goals, with varying levels of engagement with members of Congress.

Compare that with the entrenched and powerful agribusiness lobby, a sweeping set of interests ranging from farmers and bankers to agrochemical, equipment and insurance companies. It spent $127.5 million on lobbying lawmakers last year and contributed more than $111 million during the last election cycle, mainly to Republican candidates, according to the Center for Responsive Politics.

On the side of the farm lobby are the chairmen of the House and Senate Agriculture committees, Rep. Mike Conaway (R-Texas) and Sen. Pat Roberts (R-Kan.), both of whom are not interested in making major changes to the next farm bill amid the declining farm economy. This is not the time to pass a “revolutionary” law, Roberts has said. The lawmakers are dealing with tight budget conditions, so additional money won't be available to spend on the next farm bill, despite pleas from farm groups.

To compete with the farm lobby’s spending power and organization, Heritage chose to get out early this cycle, said Daren Bakst, the foundation’s research fellow in agricultural policy. Two years ago Heritage Action began holding small briefings in the House and Senate to educate staff who weren’t involved in the last farm bill debate.

By September 2016,the foundation beganrolling out of a series of papers on overhauling agricultural policy, which culminated in a blueprint for an alternative farm bill that emphasized free markets over government intervention. Heritage is not targeting all subsidies. They support thecrop insurance program that subsidizes policies that protect growers from reduced yields and crop losses due to natural disasters, but they want to eliminate subsidies that guarantee farmers’ revenue.

Heritage is at the vanguard of a broader conservative effort to build the case for revolutionizing farm policy, an exercise that involves multiple think tanks and a choice crop of agricultural economists, many of whom are affiliated with the conservative American Enterprise Institute. They include Vince Smith, of Montana State University, and Joe Glauber, a senior research fellow at the International Food Policy Research Institute and former USDA chief economist under the Obama administration.

Many of these economists and think-tank types are critical of what they call the “reverse Robin Hood effect” of farm policy, arguing that the vast majority of subsidies flow to a small number of large operations and landowners, who don’t need taxpayer assistance. About 15 percent of farm families receive more than 85 percent of all subsidies, according to Smith, and they have annual household incomes well above the national average. Proponents of existing farm policy argue that comparison is misleading, because family farms are more like small business, in that they take on a large amount of risk.

Under current law, farmers can receive up to $125,000 in subsidies for major commodities like corn, soybeans, wheat and cotton — and double that for couples — but are ineligible if they earn $900,000 or more a year in adjusted gross income. Those programs pay out when crop prices or an operation’s overall revenue drops below a certain level.

Federal crop insurance, which gives growers access to discounted policies to help protect against risks like bad weather or market swings, has no such limits. Taxpayers, on average,pick up 62 percent of farmers’ insurance premiums, USDA statistics show. In 2016, thetwo programs cost more than $14 billion.

Lawmakers on both the House and Senate Agriculture committees contend that commodity and crop insurance programs help ensure a healthy farm economy, which provides access to affordable food for all Americans, many of whom tend to take that security for granted as fewer citizens have direct ties to the farm.

At every turn, Conaway and Roberts have emphasized that net farm income has dropped by about 50 percent since 2013 (a year of record profits for growers) and that farm programs have helped prevent a calamity in agricultural America. Without those policies, they add, U.S. farmers, who are already competing on an unlevel playing field with their counterparts in countries like China and Brazil that heavily subsidize their agricultural sectors, would be further disadvantaged.

The more farm state lawmakers defend farm policy, the harder conservatives and other reformers have tried to build a coalition that can stand against ag groups and their influence on Capitol Hill.

The bench on the right runs deep. Billionaire Charles Koch, who funds a sprawling apparatus of political advocacy groups, think tanks and foundations, is one player with skin in the game. Though several Koch entities benefit from farm subsidies, he advocates against them as part of a campaign against “crony capitalism.” In this cycle, the extent of Koch-linked efforts, the amount of money being spent and through which channels, is as opaque as Texas tea.

On the left side of the reform coalition, the Environmental Working Group is leading the lobbying push on Capitol Hill, and making use of its common ground with groups like Union of Concerned Scientists, the National Sustainable Agriculture Coalition, U.S. Public Interest Research Group and the Center for Food Safety.

'Ideology can be malleable'

Agriculture industry leaders on the other side of the field say they aren’t sweating the growing coalition of reformers, but they're closely monitoring the activity, particularly from the right.

“These groups were pretty organized during the last farm bill,” said Tom Sell, co-founder and principal at Combest, Sell & Associates, a lobbying firm that primarily represents ag groups. “The good news is, I think the facts and relationships are on our side. When a lawmaker knows a farmer, there is a lot of respect there. That gives us an advantage.”

The vast majority of farmers vote Republican — and rural voters went 2-to-1 for Trump last November — but there’s always been a tension between conservative purists and Republican lawmakers who see the federal government’s role in helping farmers as a crucial exception to their distaste for big government.

Farm Policy Facts, a nonprofit backed by commodity groups like the American Sugar Alliance, National Crop Insurance Services and USA Rice Federation (each of which is a client of Combest, Sell & Associates), has been one of the only voices publicly rebuking calls for subsidy reform. It has been publishing a steady streamof blog posts and reports, training much of its fire on Heritage.

On Oct. 4, the day of the reform coalition's strategy session, Farm Policy Facts argued that no amount of change to agricultural policy will appease Heritage, EWG, AEI and other critics. Over time, Congress has shifted subsidy programs to be more free-market oriented, and the 2014 farm bill is projected to cost about $100 billion less than expected over a decade (though most of those savings are due to declining participation in SNAP, as opposed to farm subsidies).

Still, those savings are not enough to appease the right, Farm Policy Facts contends. The farm safety net accounts for less than 0.1 percent of the federal budget, and protects producers from hurricanes, drought and other unpredictable risks, the group routinely notes.

Farm Policy Facts commissioned two reports attacking some of Heritage’s recommendations. The most recent one was written by Brandon Willis, the former administrator of USDA's Risk Management Agency, which oversees the crop insurance program. He accused Heritage of painting a misleading picture of the financial well-being of producers and the risks inherently associated with farming.

“Their message doesn’t line up with reality,” said Tamara Hinton, a former spokeswoman for the House Agriculture Committee and principal at Comunicado PR. She has been among the most vocal of farm billboosters and was instrumental in raising Farm Policy Facts’ public profile, though she is no longer directly involved with the group.

“Are they really against the $100 billion in taxpayer savings, spending cuts and reformed programs, caps on support, farmers paying for their own safety net, an exhaustive hearing process, listening sessions across the country — and all of it done in a bipartisan way?” said Hinton, referring to changes to the farm bill over the years.

Farm Policy Facts questioned why groups that fundamentally disagree on so much would join the same team: “Apparently, ideology can be malleable when it is expedient,”the group said.

It's all about floor action

During the October strategy session, the reform coalition's members searched for consensus on strategy, and a potential slogan emerged: “Cut, cap and clarify.”Common ground included cutting off subsidies for wealthy farmers; providing a means of gauging performance to ensureaccountability; and bringing greater transparency to payments under the crop insurance and conservation programs.

At the forefront of this movementin the Senate has been Flake, who recently picked up some fans on the left after he announced he’d retire at the end of his term next year, a decision motivated by his dislike for Trump-era politics.

Flake has repeatedly tried to rein in farm subsidies as part of his campaign to slash federal spending. Legislation he proposed, known as the AFFIRM Act, contains many of the ideas embraced by the band of reformers, including capping crop insurance premium subsidies at $40,000 per farm, making farmers earning more than $250,000 ineligible for the program, and publicly disclosing recipients.

Flake, now unburdened from reelection concerns, is expected to make one final push on the farm bill before leaving Congress. “My bipartisan plan for the next farm bill will put $30 billion back in the pockets of small farmers and taxpayers at large, and it will do that by going after some of Big Ag’s most egregious handouts, carve-outs and subsidies,”Flake said during the October meeting.

It remains to be seen how much common ground the far-flung coalition can find, and how far each group is willing to go to fight for subsidy reform — particularly when there are plenty of other issues sustainable agriculture and consumer groups care deeply about, including strengthening conservation requirements and increasing funding for agricultural research.

“With the gravitational pull of these groups, the fact that we were all there having a civil discussion, it’s very encouraging,” said Ricardo Salvador, director of the food and environment program at the Union of Concerned Scientists. “Where this goes will be what’s really interesting.”

Blumenauer, whose Portlandia district is 93 percent urban, knows major policy changes in the next farm bill are unlikely to develop during the committee stage.Instead,his eyes are squarely on the possibility of introducing reform amendments when the bill reaches the House floor.

“If there is an open process on the House floor to deal with amendments, we’ll be in great shape,” he told POLITICO after the strategy session.

The Oregon Democratargued it would benefit House leadership to allow the Republican caucus to be more involved in the farm bill once it clears committee.

“Part of what drove the Freedom Caucus crazy is they didn’t have the opportunity to debate this stuff. They were shut out,” Blumenauer said. “There’s probably 300 [members] in both parties that think regular order ought to be followed. There is a lot of support in the Senate for what we’re talking about.”

“Issues that we’re talking about here are an opportunity for people to legislate and help people back home,” he added.

And with that, Blumenauer popped on his black, skate-style bike helmet and walked out of the Kirby Center.